Credit Union Innovation Investments Pay Off as Digital Assets Open Doors to Enhanced Services

Credit unions (CUs) might not have the same national or regional reach as traditional banks, but their members don’t expect less when it comes to accessing digital-first services on par with those of legacy financial institutions (FIs).

The good news is that CUs are stepping up to the plate to meet this demand, as detailed in “The 2024 Credit Union Innovation Readiness Index (CU-IRI),” a PYMNTS Intelligence and PSCU collaboration. The study draws on insights gathered from a survey of over 4,500 U.S. consumers to gauge members’ satisfaction with CUs offerings to identify what these smaller banks are doing well and where they need to improve.

According to the research findings, nearly 80% of all CUs report a favorable return on investment from their payment innovation efforts, a share which jumps to 90% among the 30 top-performing CUs.

Additionally, the most innovative CUs also outperformed others in several metrics. For example, 87% of these top-performers increased their membership in the last year, with this segment more likely to report a boost in member engagement and satisfaction with their online and mobile banking services compared to their less innovative counterparts.

Specifically, 90% of top-performing CUs saw an uptick in member satisfaction with their mobile app over the past year, and 83% noted an increase in the number of mobile app downloads.

CU Members Demand Crypto Payments

Vaulting of digital assets is an example of how CUs are innovating digitally, offering members safe options for managing cryptocurrencies, blockchain technology, and other digital assets.

This not only expands the range of financial products and services available to members but also provides them with convenient and reliable solutions for managing their digital assets within the trusted framework of their CU.

The increasing demand for digital assets aligns with another study conducted by PYMNTS and PSCU, the October “Credit Union Tracker®,” which revealed that 30% of surveyed consumers hold cryptocurrency, while the number of CU members holding crypto has increased by 2%.

During a recent conversation with PYMNTS, Lou Grilli, PSCU’s senior innovation strategist, addressed the increasing consumer interest in cryptocurrencies, contrasting it with the dwindling number of FIs prepared to provide cryptocurrency services to their members or customers.

“The wild fluctuations in value that used to make [crypto] exciting have flattened out. But that has made it more attractive and more like holding something steady, like gold, as an alternative investment,” Grilli said, pointing to growing interest in “countries where inflation is rampant” and currencies are being devalued.

And because CU members expect their institutions to provide services that meet their need for trust, convenience and frictionless experiences, integrating cryptocurrencies and digital assets more broadly into their offerings is emerging as a key strategy for CUs aiming to maintain a competitive edge and provide innovative services to their members.

Longer term, Grilli said that blockchain and smart contracts will present multiple opportunities for CUs to improve their services, ranging from digitizing property titles to managing digital identities.

“Our goal [at PSCU] is to help credit unions be ready when these new technologies happen, so that the credit union can remain relevant and remain competitive,” he said.